by around 20%, and doubledigit growth rates were widely predicted for at

least the next five years. Then oil prices crashed with the global recession.

Last year the economy is estimated to have grown, at best, by 1.5%. But

it is bouncing back. Some say Angola will be among the world's top five

performers again this year, with growth exceeding 8%. After four decades of strife, Angola was a basket case. A 14year war of independence against its former Portuguese masters until 1975 had been followed by nearly three decades of fighting between the communist Popular Movement for the Liberation of Angola (MPLA) and Jonas Savimbi's proWesternNational Union for the Total Independence of Angola (UNITA)\ that ended in 2002. Out of a population of 7m in 1980, some 1.5m were

killed and more than 4m forced to flee their homes. A whole generation

had missed their education. Infrastructure, political institutions and social

services had to be rebuilt, often from scratch. The pace of development

since peace returned eight years ago has been staggering. Angola feels

like a gigantic building site, as roads, ports, railways, hotels, shopping

centres, hospitals, universities—even whole new towns—rise up out of the

bush. The capital, Luanda, has changed out of all recognition, as the

dilapidated redtiled colonial buildings and encroaching slums make way

for a forest of elegant highrise hotels, offices and apartment blocks.

None of this would be possible without Angola's vast oil reserves,

estimated at 13 billion barrels. Discovered in the 1950s, oil was one of the

few things that drew investment throughout the civil war. Production rose

from 172,000 barrels a day in 1975 to 800,000 in 2002. Today, it stands

at 1.9m, making Angola subSaharan Africa's biggest producer after

Nigeria. Oil accounts for more than half of the country's GDP, 80% of the

government's revenues and 90% of export earnings.

Last year's slump in oil prices from an average of nearly $100 a barrel in

2008 to just over $50 pushed Angola's current account and budget into

deficit for the first time since the war. Despite a rebound in oil prices, the

ruling MPLA, now wedded to a market economy, is trying to slash public

spending this year to 37% of GDP, down from last year's 50%. Long

resistant to outside interference, particularly from the West, it has also

accepted a 27month IMF standby loan of $1.4 billion.

Despite this dip in fortunes, the country has barely paused for breath,

relying on international lines of credit for infrastructure projects, with

China to the fore. Since 2002, China's Eximbank has lent Angola $4.5

billion. The secretive China International Fund, which is privately owned,

has provided another $3 billion; some say the figure may rise to $9 billion.

Angola is repaying all of this in oil, overtaking Saudi Arabia and Iran to

become China's biggest supplier. Two fellow Portuguesespeaking

countries, Brazil and Portugal, have provided another $1.8 billion and $1.4